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I'll start over. Thank you very much, Rob.

Good afternoon, everyone, and thank you for joining us. The second quarter of 2026 was marked by rapidly evolving geopolitical developments in the Middle East.

This conflict, together with the resulting airspace closures, flight restrictions, and elevated fuel prices, created one of the most challenging operating environments the airline industry has faced in recent years. While passenger demand across international markets remained broadly healthy, airlines were required to continuously adapt their operations amid an increasingly unpredictable environment.

Against this backdrop, Turkish Airlines demonstrated the adaptability of its diversified business model and the flexibility of its global network. Our broad geographic footprint and agile execution enabled us to react swiftly to changing conditions while maintaining operational continuity.

Before turning to our financial results, I would like to briefly address the measures we implemented to navigate the recent volatility and preserve the resilience of our operations. Throughout the quarter, safety remained our highest priority.

We continuously monitored developments across the region and adjusted our operations in line with international regulations and real-time risk assessments. Given the changing nature of the conflict, our operational and commercial teams worked to respond quickly to new developments, minimizing disruption across the network.

At the same time, we leveraged one of Turkish Airlines' greatest competitive advantages: the flexibility of our global route network. Through disciplined capacity management, we tapped into opportunities while managing pressures from the conflict.

At the height of the war, our Middle East operations were temporarily reduced to only 8 destinations in 3 countries, from 26 destinations in 12 countries. During March and April, our capacity in the region was reduced to approximately 60%.

As operations gradually resumed from May onwards, the reduction narrowed down to approximately 30%. In response to the sharp increase in fuel prices, we channeled 58 weekly passenger and 61 cargo frequencies to high-demand routes.

These destinations include Beijing, Shanghai, Singapore, and Mauritius, among many others. In order to better align capacity with prevailing market conditions, we also decelerated capacity growth from our initial plan of about 8% to 1% through selectively reducing services on lower-return markets.

Alongside, we implemented a tactical commercial strategy to mitigate the impact of elevated fuel prices. Our actions included fuel surcharge adjustments, broadening ancillary revenue base, and route-level profitability management.

Together with our fuel hedging program, these actions helped offset around 80% of the additional fuel cost pressure on profitability. Turkish Cargo also continued to demonstrate considerable flexibility during the period.

Since the beginning of the conflict, we introduced more than 60 additional cargo frequencies across the network. These additional flights enabled us to respond quickly to changing trade flows and customer demand while further strengthening our cargo network.

As a result, in the first half of the year, Turkish Cargo increased its volume by 16%. Our prudent financial management and a strong balance sheet provides us substantial headroom to navigate an increasingly uncertain operating environment.

By the end of the quarter, our liquidity recorded as 36% of last 12 months revenues with continuing positive free cash flow. We also selectively invest in projects that support our long-term growth strategy.

Construction of Rolls-Royce engine maintenance center progress as planned, while infrastructure investments across cargo, technic, catering, and flight training are ongoing. More recently, we joined the SAF Opportunity Fund, further supporting our long-term sustainable aviation fuel strategy and diversifying our supply chain.

Now, I would like to turn your attention to our results. In the second quarter, Turkish Airlines' total passenger capacity increased by around 1% year-on-year, bringing the first-half capacity growth to 5%.

Between April and June, we carried more than 23 million passengers with a load factor of 84%, indicating almost 2 percentage points improvement annually. Despite the busy summer schedule and the challenges posed by the evolving geopolitical situation, in June, our on-time performance improved 3.5 percentage points annually and surpassing 86%.

With this result, Turkish Airlines was among the best-performing airlines in Eurocontrol area. Passenger revenues increased by almost 15% compared to the same period last year, benefiting from robust demand from Asia and strong pricing across our network.

As mentioned, cargo was another highlight of the year, delivering one of its best performances to date. Adapting to the shifting trade flows and our extensive network, its revenues increased by 58%, reaching nearly $1.3 billion, mainly driven by more than 40% increase in yields.

Accordingly, our total revenues rose by more than 20%, surpassing $7.2 billion. Elevated fuel prices represented the most significant headwind during the quarter.

To mitigate this impact, alongside fuel surcharge adjustments, we focused on improving operational and staff efficiency. These initiatives are expected to result around $320 million annualized benefit.

Together with strong passenger yields and gains from our fuel hedging portfolio, EBITDA amounted to $906 million, corresponding to a margin of 12.6%. Despite the significant increase in fuel expenses, profitability came in above the upper end of the guidance range we communicated at the end of first quarter.

Net income realized at almost $200 million, supported by the contribution from our investment portfolio. Looking ahead, forward bookings for the remainder of the summer season remain healthy, with both passenger and cargo trends developing broadly in line with our expectations.

Currently, passenger revenue yields remain elevated at high single digits and forward load factors tracking slightly above the year's levels, despite the renewed fuel price risks. I will now pass the call to our CFO Metin Bey to elaborate on our results and further provide insights.

Thank you, Murat Bey, and good afternoon, everyone. As briefly outlined earlier by Professor Şeker, the second quarter shaped by uncertainties related to the war in the Middle East, unprecedented rise in fuel prices, and evolving overflight restrictions.

While operating conditions gradually improved throughout the period, it required ongoing adjustments to our network. With disciplined management, we successfully redirected capacity towards stronger-performing markets while maintaining connectivity across our system.

As a result, our passenger capacity increased by around 1% year-on-year. Demand fundamentals remained supportive in the second quarter, reflecting the resilience of our diversified network.

Although traffic patterns continued to change across regions, effective capacity deployment and healthy passenger demand contributed to a 1.8 percentage point improvement in load factor. This performance demonstrates our ability to align capacity with demand while preserving operational efficiency in a rapidly changing environment.

We successfully implemented our direct sales channel strategy, indicated by the 13 percentage points decline indirect sales ratio in just 2 years. Our new distribution platform, TK Connect, proved itself for better ancillary revenue generation, along with materially decreasing distribution cost by about $100 million annually.

Turning to regional performance, Asia remained our strongest-performing market during the second quarter. Demand continued to benefit from change in competitive landscape following the conflict in the Middle East as a portion of passengers shifted away from Gulf towards alternative routings.

We responded by further expanding capacity across key markets, including China, Hong Kong, Thailand, among others. As a result, region's capacity increased by 7% compared to our initial plan, representing an 18% annual growth.

This additional capacity was well absorbed by the market, as indicated by 1.8 percentage point load factor improvement in the region. Australia also delivered another strong quarter where capacity increased by more than 10% year-on-year, while revenues grew by 43%, with both Sydney and Melbourne performing ahead of internal targets.

In parallel, we introduced a new product segmentation model across selected Far East markets, which is expected to enhance ancillary revenue generation as the rollout expands to additional destinations during the second half of the year. While gradually normalization is expected as Gulf carriers restore capacity, we remain well-positioned thanks to our extensive network and strong presence across the region.

In Africa, load factor improved by 3 percentage points year-on-year to 79%. During the quarter, we refined our regional network by spending underperforming routes and concentrating capacity on markets with stronger demand.

At the same time, frequencies to Mauritius were increased to 10 weekly flights, while seasonal services to Seychelles resumed in June, allowing us to capture demand in high-yield leisure destinations. The operating environment remained mixed in Europe.

Higher fuel prices and softer demand in certain connecting markets to the Middle East required capacity optimization, with selective frequency reductions and temporary route suspensions implemented. Still, transit demand remained supportive, with business traffic from Northern Europe increasing by 10% year-on-year, accompanied by 6% improvement in yields.

Similar trends we observed in Southern Europe. Transfer traffic partially offsetting softer local demand.

We also continued to strengthen our network through targeted expansion, including additional frequencies to Bucharest, Sofia, and Cluj, and Yerevan, while new services to Timișoara further enhanced our presence in the region. Following the increase in fuel prices, frequencies on some North American routes were reduced, allowing additional capacity to be redirected toward higher-yielding markets in Asia.

The FIFA World Cup demand developed broadly in line with our expectations and contributed to our revenues. Although demand from the Middle East softened, most of the lost traffic was replaced by stronger passenger flows originating from Europe and Asia.

In the second quarter, total revenues continued to benefit from both passenger and cargo operations. Passenger revenues increased by nearly 15% year-on-year, reflecting the positive impact of higher traffic volumes, yields, and improved load factors.

Our cargo segment once again demonstrated its strategic importance, building on the positive momentum established in recent quarters. Cargo revenues increased by 58% annually, driven by constrained market supply and continued growth in e-commerce demand.

Currently, as the world's largest air cargo carrier by market share, Turkish Cargo remains well-positioned to respond quickly to changing market conditions. On the AJet side, we continued to strengthen the commercial performance of AJet during the second quarter, aided by healthy demand, network optimization, and a enhanced ancillary product portfolio.

AJet's 8% annual capacity increase was mostly backed by the continued expansion of its international network. Unit revenue increased by 18% year-on-year across the network, reflecting the improvements in both domestic and international operations.

At the same time, international load factor improved by 3 percentage points to 82%. Ancillary revenues grew by 75% annually, accounting for 15 of total revenues, up from 11% a year ago.

This bestly highlights the growing base of high-margin products to AJet's business mix. Our focus remains on improving network profitability, optimizing aircraft utilization, and further enhancing the customer experience through a broader range of ancillary products and digital services.

When we look at our financial performance, the second quarter delivered substantial top-line growth. Passenger revenues remained the primary driver, backed by the robust underlying strength, while cargo continued to benefit from constrained market supply arising from the geopolitical developments and favorable demand conditions across key trade lanes.

Conversely, elevated fuel prices and other cost pressures negatively affected our financial performance. As a result, EBITDA decreased by 40% to $906 million, corresponding to a margin of 12.6%.

Supported by contributions from our investment portfolio, net income reached almost $200 million for the quarter. Total CASK increased around 35% year-on-year, primarily reflecting higher fuel costs.

Excluding fuel, unit cost growth was mainly driven by higher personnel expenses, which reflected head count expansion, salary increases, and inflation impact. The slower pace of capacity growth also increased unit costs through lower aircraft utilization.

In addition, rescheduling of certain aircraft maintenance activities resulted in approximately 1.5 percentage points to the increasing CASK. Higher market prices weighed on fuel CASK during the quarter.

Our hedging strategy provided some mitigation, although its impact remained limited due to the sharp upward movement. Despite these headwinds, we remained focused on improving our operational efficiency and maintaining cost discipline across the organization, aiming to save up to $300 million throughout the year.

Turning to our balance sheet, we generated around $250 million of free cash flow during the quarter, enabling an increase in on-hand liquidity to around $9.6 billion. Meanwhile, net debt increased to $1.2 billion, mainly reflecting ongoing fleet investments and currency impacts.

Strong liquidity position provides us with meaningful financial flexibility at the current backdrop, reinforcing our resilience against ongoing market pressures and positioning us well to navigate future uncertainties. Looking ahead, visibility for the remainder of the year remains limited.

In the third quarter, we expect passenger capacity to increase by 6 to 3% to 6% year-on-year, supporting a mid-teen increase in total revenues. We also anticipate a mid-single-digit increase in ex-fuel unit cost.

Based on these assumptions, we expect an EBITDA margin of 20 to 22% to 25%. Given the fluidity of current environment, we stand ready to adjust our plans dynamically as conditions evolve.

During the first half of 2026, we continued to improve fuel efficiency through more than 100 operational optimization projects, investments in new technologies, and the ongoing renewal of our fleet. These initiatives resulted in fuel savings of 25,000 tonnes and prevented more than 78,000 tonnes of associated carbon emissions.

Our progress was also reflected in external sustainability assessments and industry recognition. We strengthened our position across several leading international ESG assessments, including achieving an EcoVadis gold medal and an A rating from MSCI.

Looking ahead, sustainable aviation fuel remains an important part of our decarbonization strategy. We have developed short- to long-term SAF plans covering supply agreements and investment opportunities with a particular focus on domestic production capacity.

In this context, we signed memorandums of understanding with Tüpraş, Çalık Enerji, and SOCAR, while our planned investment in DB Tarımsal Enerji is expected to support the development of SAF production facility in Türkiye. Most recently, we joined the SAF Financing Alliance Fund, expanding our access to international SAF financing and investment opportunities.

With this, we conclude our presentation and continue with the Q&A session.

Thank you, Rob. This is Fatih, Head of Investor Relations.

I would like to thank all of our participants, Murat Bey and Metin Bey for their comments. It was indeed very difficult quarter.

Now Murat Bey will help us underline the main drivers of the quarter. We got number of questions from our dear participants, and I would like to start by the impact of the war.

First question is, what was the impact of the Gulf War on your first-half results?

Thank you very much, Fatih. Let me start with the capacity.

As also mentioned during the presentation, we were intending to place a capacity of about 8% ASK-wise on the top of last year. However, now we are guiding somewhere around a 4 about 4 percentage points.

In the second quarter in particular, we were about 6% below our projected capacity. Yet, part of that impact was compensated with the 3.5 percentage points higher load factor.

When you translate these into numbers, our passenger revenue was about $600 million higher than what we projected before the war, and that translates into a yield improvement of about 8% percent. Cargo similarly was up by $600 million.

Overall, $1.2 billion revenue increase was realized during the war with the better yields and better load factor environment. On the expense side, of course, the biggest impact came through the jet price increase.

The 90%, roughly 90% increase in jet fuel translated into about $1.3 billion worth of higher fuel expense, together with the crack spread. Then we had higher-than-anticipated inflation, which also is related to the impact of this war.

In the first half of the year, we were guiding about 11%, 10% to 11% inflation in Turkish lira, CPI. It ended up being about 18%, it's 8 percentage points higher inflation.

Turkish lira remaining stronger than our anticipation led to a Turkish-lira-related higher cost burden of about $400 $450 million. A last factor was the lower utilization.

Middle East region makes about 6% to 7% of our overall capacity. Despite of the fact that we could redirect a significant portion of this capacity to some other parts of our network, aircraft utilization was lower, about a 9%.

This also led to about $150 million to $200 million additional loss. When you combine all these impacts, some benefits due to the higher yields and then the cost burden from the jet fuel, the inflation, and lower utilization, net impact of the war was around $900 million in the first half of the year, which then we further tried to decrease by taking certain measures on cutting the costs, improving efficiency, and then, it brought us to on the operational side, a negative $120 million, which was the limiting impact of all these positive steps we took.

Thank you, Murat Bey. Obviously, the operating environment is quite dynamic, and our analysts are wondering about the operating environment.

Could you update us on the status of your operations in the Middle East?

Before the crisis, we were actively operating in 12 countries and more than about 28 destinations. Currently, we are flying to 14 of these destinations out of 28 in 9 countries, and then we are having 300 about 300 weekly frequencies.

Before the war, it was about 400 weekly frequencies. Iran is still shut down.

Kuwait, Erbil, Bahrain are also shut down temporarily, and yeah, overall we are having about 300 weekly frequencies. In terms of ASK, compared to last year, in the overall first half of the year, we are about 28% below last year's traffic numbers.

Thank you, Murat Bey. How did you manage your capacity deployment across regions due to the war?

Since the beginning of the war, we secured about close to 100 new passenger and cargo slots. 38 of these are permanent and 61 slots are temporarily obtained, which allowed us to allocate capacity more efficiently and profitably across the network.

We saw a little bit of a demand decrease in America-Middle East corridor. That's why flights to and from the Americas, mainly North America, was reduced by 17 weekly frequencies, but this capacity was shifted to Far East region, about 33 additional frequencies, and Africa region, where the demand continued to be strong.

Overall though, there were certain Africa routes, certain South Asia routes, and even some domestic and European routes where the demand was very weak and we were making losses. Overall, in the second quarter, which will continue to remaining part of the year, we cut 450 frequencies, and as I said earlier, with the additional 100 and about 100 additional frequencies, on net we have cut about 330 frequencies in total.

Your capacity in North America declined slightly, whereas overall capacity growth decelerates from 5% to 1%. Are the frequency decrease in the Americas is a temporary adjustment driven by the market conditions, or does it reflect a more structural shift in the network strategy?

Additionally, what is your expected capacity growth for the overall network?

US actually in the second quarter, as it was presented, is briefly mildly flattish. When you look at the first half of the year, we have added about a 1.

1.5% capacity on the top of last year, we have not really completely shrunken the capacity, but we have readjusted the frequencies. This is definitely temporarily, because one of the main networks which was in and outbound from the Americas was Middle East, and that region was heavily affected in the second quarter.

On the other hand, there was a very strong demand two ways, outbound and inbound, to Far East, then South and Central Asia regions. We had to readjust the capacity to better utilize our wide-body fleet.

Overall, this is a temporarily decrease. Overall, we not only, of course, the war, but in Venezuela we also had to cut frequency because of the earthquake.

We are aiming to bring this capacity, these frequencies, back to the US market in next year, especially when we will be receiving quite a few wide-body aircrafts. We view these changes as temporarily tactical adjustments rather than a structural decrease in Americas capacity.

We very firmly believe that Americas, both North and South, are strategically very important markets. Then we don't expect further changes to our capacity plan over the coming quarters.

Network-wide, our annual capacity growth plan is around 4% overall. This represents 2.5 percentage points improvement compared to the guidance that we provided at the end of the first quarter.

Still, capacity growth is down by about 5 percentage points compared to our budget, but we are seeing improvement, and as we see improvement in the market, we are doing our best to put capacity.

Thank you, Murat Bey. Following the recent capacity reductions by some carriers in Middle East, have you observed an increase in passenger numbers on your network?

We also have an additional online question: do you expect the competitive dynamics in the Middle East to remain favorable in the third quarter?

Sure. We experienced a shift to our network due to the absence of the Gulf carriers.

At the very beginning of the conflict, there were some stranded passengers in their destinations that could not travel, but it did not last long. Then we saw that our peers in the Gulf region resumed their operations through the past months, and we entered the summer with almost having the full capacity of our peer carriers from the region.

Overall, we saw, of course, some net impact on growth in our prospective passengers. We can say that a 5% net growth in our customer base that are passengers, 5% of our passengers are first-time passengers that flew with Turkish Airlines since March of this year.

In the reasonable flight corridors, we are seeing an improvement on our passenger base compared to our competitors, which shows that we have been able to gain some market share. It's a mild, but still a positive amount of market share gain through this period.

Compared to their pricing and then their involvement, I could say with the Gulf carriers, we are back to where we were before this war escalated. For the remainder of the year, we are expecting a gradual normalization in the overlapping routes with our peer Gulf carriers.

Based on the current forward booking data, the growth trend in demand from Africa to Far East, and from various parts of Europe, North and West Europe to Far East, from South Europe to Far East and vice versa, remain quite strong in the market, in our customer base. For example, from Africa to Far East, we saw a 70% increase in the number of passengers.

From North and Central Europe to Far East, we saw about 38% increase in number of passengers and with reasonable yield improvement as well. Fatih, what was the second part of your question?

Does the dynamics in the Middle East remain favorable for the Turkish Airlines in third quarter?

Yeah. I think I answered that.

I would not call it favorable. It's the same level of competitiveness, comparative market what we were seeing last year or in this year before the war.

Thank you, Murat Bey. Next quarter will be on the revenue side.

To be honest, we have been highlighting the robust demand environment for some time now, especially on cargo, but again overall, total revenues rose by around 20, 21% in the first second quarter. Which measures have you implemented on the revenue side to achieve this in response to surging fuel prices?

Do you have any idea about the evolution of the ticket pricing?

The first response at the very early months of the crisis was to close certain lower fare classes on specific routes where demand was holding up. Then we started to increase the fuel surcharges across the network.

I think at the first stage, in April, we increased in about 50 routes the first fuel surcharges by about 10%, 15%, and then we expanded this to more than 100 routes. Incrementally, we were able to increase the ticket prices throughout the network, which translated to somewhere about the $400-million-ish additional revenue.

Overall the yields, RASK, unit revenue was up by about 8%, 9% levels. Furthermore, we looked into the ancillary revenue items, and about 10 to 15 different ancillary segments, we increased the prices, and it also corresponded to somewhere around $150 million additional revenue.

Combined benefit of these actions that we implemented in the second quarter was around more than $700 million compared to our budget. Considering the about 8% lower capacity, this was quite supportive of our bottom line.

Together also with cargo, when you include the high load factor and high yield environment of cargo, we were roughly able to reflect 80%-ish of the fuel expense increase on the revenue in the second quarter of this year.

Thank you. Murat Bey, I think we got question from football fan.

Could you comment on the impact of the World Cup on the second-quarter performance?

Honestly speaking, the net benefit was lower than what we expected. Of the 16 cities the game were played, we were directly flying to 11 of them, and then we added no, sorry, of the 16 cities, we were flying to 12 cities, and then we added about more than 10 frequencies in these cities during the tournament.

The bottom-line contribution was a very mild of $5, $6 million additional revenue.

Thank you. Is it possible to provide color on current booking trends for the third quarter and for the remainder of summer season?

Do you have any anticipation about next year's yields?

The third quarter booking across the network, we expect the capacity to increase around 3% to 5%, while the load factors are in line with last year. Currently we are seeing that the yields in the third quarter are still up by about 6% to 8% levels.

The strongest region is continuing to be Far East. We expect about 15% to 20% capacity increase in this region, accompanied by about 8% to 10% higher yield.

Following that, South Europe booking trends are continuing to improve since the beginning of the summer season, end of June and beginning of July. Third quarter bookings are around 4% above last year.

Then in Eastern Europe, bookings are up by about 16%. We have put about 16% higher capacity, and the load factors are also holding up.

Overall, the third quarter performance is going well. The yields through, I could say not only August and September, but continuing until October and November, we are seeing that the yields are up by about 15% as compared to last year.

The high-yield environment is likely to last through the remainder of the year. The visibility is still not too long.

We are seeing some erosion in the load factors towards the October and November months. Overall, I could say region by region, in Europe, the yields continuing into the fourth quarter as well, third and fourth quarter together, jointly in the second half of the year.

In Europe, yields will be up by about 5 percentage points. In Europe, Far East, as I said earlier, high single digits.

Americas, again, mid single digits. Overall, I think 6% to 7% yield improvement, together with about a 3 percentage points capacity improvement, is what we are expecting for this year.

For your question about the next year yield environment, I think we have to see the end of summer and how this escalated tension and high fuel prices are going to lead us to the last quarter of this year.

Thank you. We have been getting this question a lot in the recent times, especially after the war.

What about the demand in Türkiye evolving, and are you observing any signs of slowdown?

Right after the war, March and April, we saw some drop, and unfortunately, it overlapped with the Easter and then the Eid holiday period. We saw some drop in demand.

Then, as the tension of the war impact on Türkiye decreased, with the start of the summer season, we saw the kind of that negative impact vanished. Incoming tourists to Türkiye, the statistics was announced recently by Turkish Statistical Agency.

Overall, last year, we had about 31 million passengers traveling to Türkiye, and this year, it was a very much the same number. The international tourists number shrank by about mildly 2.5 percentage points.

It went down from 26.3 million to 25.7 million tourists, international tourists. Including the Turkish citizens, ethnic travelers who live abroad and traveling to Türkiye, we see that overall numbers is around 31 million, and it has not come down.

The impact on Turkish Airlines in particular, because of the cancellations of some services from the competing airlines, we saw that in the first half international travelers flying with Turkish Airlines to Türkiye increased by about almost 7%. We have seen overall a little bit of a benefit of that.

When we look at the forward bookings, we see that the demand to Türkiye seems to be resilient. Incoming pax with Turkish Airlines to Turkish market is about 12% more tickets and about 17% higher revenue is what we are seeing for the Turkish market.

Thank you. Are peers reporting significant resilience in premium cabin, and what is the situation on your operations?

On the premium business class, especially after we have started the increase our operation to the Far East countries, we see that the business class load factors are up, and then the yield environment is also up. The business class load factor was about 3 percentage points higher.

The increase in business class load factor was 3 percentage points higher than the economic class load factor, and then the yield was about, again similarly, 3 percentage points higher than last year. This, especially on the long-hauls, Far East outbound and inbound, we are seeing a strong demand.

I think it's fair to say that we are having a record amount of load factor, about 60%, 65%, at our business class segment.

Turning to cargo, cargo yields rose remarkably in the second quarter. How sustainable do you believe the current levels are, and what is your outlook for the second half of the year?

If you are saying sustainability continuing into 2027, I'm not sure it will sustain that long. Definitely there is a strong opportunity into 2026.

The Baltic Air Freight Index and Drewry Index are showing a very strong momentum on the positive side. Then we have been benefiting from this strong environment.

In the third quarter, we are continuing to see higher yield environment, and then the load factors are keep increasing. Overall, for the overall year, we are expecting about a 25% to 30% increase in cargo revenues as compared to last year, and overall 6% to 8% increase in the amount of cargo carried, and more than 20% increase in the cargo yield environment for the overall year.

It's a reflection of the fact that the strong momentum that we have observed in the first half is likely to last into the second half of this year.

Moving on to AJet, could you provide us an update regarding its performance?

AJet had about 89 aircraft by the end of the first half, which is about 11% growth, and number of passengers had a similar ratio of growth of about 12%. The revenue was up by about 30%, because the unit revenues was also very strong, and then they had reached a passenger size of about 12%.

Of course, these are the positive developments, but on the other hand, AJet was more prone to the developments in the region. Middle East region makes a bigger portion of their operation, they were just like the TK mark, was able to relocate their capacity to different alternative routes, but they had at the bottom line a higher impact of this war.

They had to cut about 10% of their scheduled capacity ASK-wise for 2026.

Could you comment on the impact of jet fuel prices on your cost base, and what assumptions are reflected into your outlook for the remainder of the year?

Providing an outlook definitely is difficult on Brent and jet. There are too many moving pieces.

Just in 2, 3 days, we have seen about 20% decrease in Brent and in jet price from its peak level of by the end of July, 28th of July, I think it reached a peak, and then since then it has been coming down. It's making a projection quite difficult.

When we had the budget at the beginning of the year, our projection was about $65 on the Brent, and currently it's around $85, our current projection. On the jet, we were projecting about $700, and currently year-end expectation is somewhere between $900 to $1,000.

With these figures, we are expecting about $2 to $3 billion, it's going back and forth, additional fuel cost compared to our expectations at the beginning of the year. This scenario, our fuel CASK is expected to be about 35% to 40% higher than last year.

Another moving part is the crack spread, and assuming an average crack spread of 13.8 times, a dollar increase in oil price is expected to have about a $100 million annual impact in our bottom line.

Thank you, Murat Bey. Could you elaborate on the current hedging ratios, also is there any plan to review or revise your fuel hedging strategy?

We have

the last revision of our fuel strategy was made at around like '27, 2017, after the 2016 we had a significant loss, and then we had to revise our strategy. Every year we review our strategy, actually.

Far, we have seen that the strategy was not working very inefficiently. When you look at the last 6 years, including the year of the pandemic, our overall from 2020 to 2025, our overall net hedge gain was about 50%, when our peers had $300, $200, and up to $2 billion hedge losses.

When you look at for a shorter period from 2023 to 2025, a 3-year window, our hedge gain was about $180 million. Again, our peers, especially in Europe, had around like a $250 to $400 million losses.

Overall the strategy is working on the mid to long term, is working efficiently. What we have seen more recently is crack spread, the gap between jet fuel and Brent is also increasing, the correlation is decreasing.

There are alternative products like gas oil, or directly the jet fuel availability, is enabling us to expand our strategy. Based on the most recent developments, we are going to continue to work on improving our strategy to provide more flexibility and more foreseeability.

The current strategy today, we are hedged by as of today, I think we are hedged around 50%, and our break-even price on the Brent is around $73, and we only hedge on the Brent still. With the with the revision, we will be looking into using a wider range of products and using a wider range of I mean hedging products, and also widening wide wider wide range of Brent, gas oil, or even jet will be able to hedge.

We will be expanding our strategy as well. Today, as I said, we hedged up to around 50%, and our break-even is around a $73.

Thank you. What was the major reasons that drove ex-fuel unit cost materially higher?

Ex-fuel cost, the biggest portion came from personal expenses, like half of it was related to personal expenses. As I think I answered in the first question, personal expenses was affected by the global high inflation, and in particular the high inflation in Türkiye.

About 30% of our expenses are in Turkish lira, and all personal expenses of Turkish Airlines and all of our subsidiaries are in Turkish lira. That inflationary impact and the value the the value of Turkish lira put an put an spot in the personal expenses.

Following that, the second big item was aircraft ownership and then airport fees. We have been seeing again related to the global inflation, we have been seeing in increases in airport tariff rates, the air navigation fees, and then you know these related items also helped increase our our ex-fuel CASK.

Murat Bey, we have a follow-up question on personnel. I will tell you about the question.

It's from Hamza Bey. How do you plan to control your staff costs?

You have been targeting to save staff costs, but there has been no progress. Can you please guide us for the 2026 expectations?

Also, can you please run over your ex-cost increase targets of mid-single digits?

Can we what? Last part?

Last part is ex-fuel CASK drivers for the full year. The first part is about how do we expect to contain the staff cost inflation going forward.

We have a union agreement, and then it's a 2-year agreement, and this is the second year of that agreement. Then within that, every 6 months we have to adjust the salary at the rate of the Turkish lira inflation rates.

That's what we have done in the month of July. To take a measures to kind of control our personal costs, what we have done since the beginning of this year is we have frozen personal hire other than the fleet-related expansion.

We have about 30 aircraft deliveries, and relatedly, we are still recruiting to certain degree, but at very limited level. Our flight academy, for example, this year have frozen all the cadet recruitments.

We have not hired any staff. Our subsidiaries are also paying great attention to kind of cut the hiring.

This is the first thing we are doing. Then there are certain items in the payroll scheme that are not led by the union negotiations, and we are trying to find ways to improve the personal efficiency.

We're still working on it. We have not finalized the work, but I'll be able to say more transparently the achievements of this.

We are expecting $200 $300 million about, sorry, $200 million improvement on the personal expenses overall for the second half of 2026. The significant portion of our expenses related to our 100% subsidiaries are also related to the personal expenses, the measures we will be taking in Turkish Airlines, our main brand, are going to be also implemented in our subsidiaries as well.

That's why with this several measures, we're aiming to limit the personal CASK increase. Maybe a third factor, of course, this is still beyond our control, but this year inflation was on a very steady path of decline to about 20% levels, and then Turkish lira depreciation against dollar was also of a similar magnitude, about 21%, 22% levels.

This war, which we think is going to have a temporary impact, has led a much higher inflation rate, as a result of which we end up being paying in dollar terms higher personal costs. Towards the end of this year, we'll see more normalization, and continuing into '27, we'll see more of this normalization, and then the extra burden will be alleviated.

Second part was the third quarter's expected ex-fuel cost, the run rate decreasing from 16% to mid-single digits. It is mainly capacity ramp-up and base effect.

Murat Bey, I think will mention those in the follow-up questions about guidance, which now we are heading on. Continuing with the guidance, how should we think about your expectations for the third quarter?

For the third quarter, I think Metin Bey expressed them briefly during the presentation. About 3% to 5% capacity growth is going to continue.

The the the quarter is moving, I mean we are in the kind of the middle of the quarter. The yield environment is continuing to be strong.

That's why we are guiding an EBITDA margin of somewhere between 20% to 25%, but I believe we will be closer to the upper part of this guidance level. In the number of passengers, pax side-wise, it's also is likely to increase by additional 3% to 5% levels.

Thank you, Murat Bey. Given ongoing supply chain challenges at both Airbus and Boeing, have your delivery expectations changed, and can you guide us about the deliveries for this year?

The delays in aircraft deliveries, we have already included them in the existing plan. Then from Boeing or Airbus, we are not expecting many more delays in the aircraft deliveries.

We had today our 563rd aircraft. We are aiming to finish the year with 500 about 80 aircraft by the end of this year.

What is the estimated CapEx and net debt level for 2026? Do you expect EBITDA ratio to reach its peak this year?

In line with the new aircraft orders and as a part of our fleet expansion strategy, we expect an increase in net debt. Considering the current operating environment, we have selectively trimmed down this year's CapEx plan by about $1 billion.

Currently, it's going to be somewhere between $4.5 to $5 billion. Before, we were guiding up to $5.5 billion.

I think we'll be closer to the lower part of this current guidance. This year, we might temporarily, I would say, exceed our long-term leverage target of 2 to 2.5 times due to the negative effect of the war on our EBITDA.

At last year, we had a net-debt-to-EBITDA multiple of 1.6 times. This year, our expectation is to be 3.3 times.

Thank you. Continue with the GTF problems and the groundings, can you give us the details about the current number?

At the moment, we have around 40 aircraft still grounded. Aircrafts are changing, but the numbers are more or less around these levels.

There will be some ramping increase in the number of grounded aircraft towards the end of last year. We had a very constructive meeting with Pratt & Whitney in Farnborough Airshow about 2, 3 weeks ago.

They are trying to increase the maintenance rate of our engines. Hopefully, by next year, we'll be able to have an improvement on the induction rate of our engines.

Currently, we have 40 grounded. Towards the end of this year, it will go up to about 50, 55 aircrafts.

Thank you, Murat Bey. We have a question about recent EU reform proposal on ETS.

What do you think about EU Emission Trading System proposal to expand its scope? Could you quantify the potential implications on your operations?

The document was published on the kind of mid-July. We are aware of the ETS system.

We were already using some carbon emissions to comply within the trading system. What does this new document brings is it increases the scope of the operation, so that a higher percentage of our flights can be affected.

Currently, it's about 1% of our flights that are affected, and then it can go up to 10% of our overall flights. The financial impact is still a little early.

We have seen the document, but we are trying to understand the details of it. Of course, from 1% to 10%, it's a significant increase.

The net financial impact and how the kind of the calendar, how it's going to be implemented, is not very clear yet. Maybe in the coming months, I will be able to say more clarity how much of a financial impact this additional carbon emission credit requirement is going to bring to us.

We have two more questions. These are rather small questions.

We'd like to thank Görkem for his participation. Should we expect maintenance expenses to stay at this level in the second half?

Mainly we that's what we are having in mind. We don't expect a significant increase in the maintenance costs.

A very big portion of the maintenance services for Turkish Airlines is provided by Turkish Technic. In the second half of the year, we expect those expenses to be broadly the same.

With our new capacity assumptions and then the updated plans for the second half of the year, the probably like a mild 3%, 4% percent percentage point increase due to the higher inflation and personal costs of Turkish Technic, we might see some increase. On per-unit basis, in terms of like a maintenance CASK-wise, we don't expect an increase, yet we might see some decline due to a high capacity increase.

Our last question: passenger flight liabilities on the balance sheet rose to $4.2 billion from $3.1 at the end of the year. How much of this increase is due to volume versus fare, and what is your expectations regarding the forward bookings, which we already answered on the second part?

Yeah. By the end of this first half, passenger flight liabilities for Turkish Airlines increased by close to 40% compared to the end of last year.

Then this growth was driven by more than 20% increase in the volume of tickets sold, and about the remaining 10%, 15% was due to the increase in unit prices. In the third quarter, the forward booking sales show double-digit percentage growth compared to the same period of last year, with the September-November period recording the highest increase.

Thank you, Murat Bey. With this questions, we conclude our earnings call.

I would like to thank you both, as well as our participants, for their time. We hope to be with you next quarter with positive developments on the news flow.

Thank you very much.